NCBFAA Freight Forwarding and NVOCC Committee
Meeting Minutes
Saturday - September 16, 2006
The Wyndham Washington DC

Freight Forwarding/NVOCC/Air Committee Attendance:

Position / Name / Attending
Area 1 / Open position
Area 2 / Hermann Amsz / No
Area 3 / Geoff Powell / Yes
Area 4 / Jan Fields / Yes
Area 5 / Air Freight Chair Scott Case / Yes
Area 6 / Bob Coleman / No
Area 7 / Chairman Billy App / Yes
Area 8 / Frank Parker / Yes
Area 9 / Co-Chairman Jeff Coppersmith / Yes
NVOCC Chairman / Joe Meunier / Yes
NVOCC Co Chairman / John Abisch / Yes
Security Chairman / Bill Evans / No
Legislative Rep / Jon Kent / Yes
Transportation Counsel / Ed Greenberg / Yes
Senior Counsel / Peter Powell Sr / No
Guest / Gary Klestadt / No
Best Practices Chair / Darrell Sekin / Yes
Guest / Gary Ryan / Yes
Guest / Tom James / Yes
Guest / Paulette Kolba / Yes
Guest / Len James / Yes
Guest / Myra Reynolds / Yes
Guest / Jill James / Yes

Call to Order and Introductions
Everyone was introduced and Billy App opened the meeting by adding Anti-trust issues and NVOCC to the agenda.
NVOCC
Joe Meunier announced the construction of the official NVOCC Committee and issued the attached minutes. A conference call will be held within the next two weeks and responsibilities of committee members will be defined. There is still a need for representation from areas one, two and eight.
Legislative Issues – Jon Kent
"Port Security Improvement Act of 2006" – H. R. 4954
The Port Security Act passed the Senate on 09/14/2006 and ended up being a good bill. The previous draconian amendments were eliminated and we are more satisfied with the final results. The bill addresses mostly import ocean.
A good bit of what you see in the final draft came from the suggestions from the NCBFAA.
There still remains a push by Congress to require one hundred percent radiation inspection at origin port. If this is ever adopted, the U.S. will be expected to also comply therefore affecting our exports.
With CTPAT regarding tiers; if an NVOCC is consolidating fourteen shipments and one is not CTPAT, then the entire shipment will not be eligible for green lane priority.
The TSN committee, specifically Sandra Scott as chairman would be someone to go to and discuss data elements formulated for ITDS.
There are currently six committees; three in house three in senate reporting to DHS.
We will address specific areas of the security bill when we go to capital hill on Tuesday - our previous position paper will be updated.
Automated Export System (AES)
Below Comments made by Pat Fosberry, who submitted this agenda item:
AES - The forwarder filing AES and the USPPI will be liable for all fines. The carriers have no liability when the dates of vessels change, vessels themselves change, or when cargo is advanced on an earlier vessel. When data must be transmitted AFTER the sail date, we are then liable for fines and penalties, which are certain to come automatically once the new fines are in place and Customs is in charge of enforcement. Why have the forwarders and USPPI'S been mandated to use AES, yet the carriers have not. This was discussed and felt that we do not want the carriers to have access to AES, however all agreed that census needs to define expectations and have the procedures in place to penalize the actual party causing the error.
Carrier Best Practices Committee Report.
Darrell Sekin spoke on the carriers best practices committee actions. The committee is focusing on addressing door delivery and the holding of brokers as responsible parties for the payment of demurrage when they are only listed as the notify party on the bill of lading or simply supplied the delivery order. The NVO’s are sometimes responsible for demurrage depending on the circumstances.
According to Transportation Counsel, the "merchants clause" on bills of lading does not clearly make the notify party a responsible party to the transaction. We will go to the FMC to obtain an official ruling that the notify party is not included under merchants clause. We will do this through the declaratory order procedures. A sub committee will be named to address this issue.
Darrell Sekin submitted the attached report which was later presented to the Board.
Maritime Issues - Ed Greenberg
ANTI TRUST
A formal paper was issued by World Shipping Council in support of the carriers’ antitrust immunity. A commission was formed to study the anti trust regulations and a hearing will be held October 18th.
Sensenbrenner is pushing the effort to study antitrust immunity protecting both carriers and marine terminal operators.
Should we participate?
We have had discussions with Chris Koch at World Shipping Council regarding NVOCC filing status. We are against mandatory tariff filing requirements, but there is really no direct correlation between this and the topic of antitrust immunity. Note that more than eighty five percent of freight moves under contract.
If anyone has any issues for testimony against antitrust immunity please get with Ed Greenberg. We will find out from the commission as to what is needed; statements, testimony, etc?
NIT League has chosen not to participate in antitrust immunity discussions.
John Abisch asked for a consensus and for the NCBFAA to prepare a position paper on Antitrust provided NCBFAA budget allows.
Herman Amsz will be solicited for his participation in the preparation of the position paper.
CARGO LIABILITY ISSUES
KIRBY Case
NVO issued bill of Lading
Cargo was destroyed by railroad - could the shipper separately sue the inland carrier?
Supreme Court said no as the bill of lading issued by the NVO presides and their limits of liability under the Himalayan clause prevails.
SAMPO Case
Similar circumstances with ocean bill of lading issued by carrier
The second circuit court rules against enforcing the Himalayan clause
This allows for the shipper to sue the inland carrier directly, effectively disrupting the Supreme Court ruling.
The second court contends the CARMACK agreement should be a consideration - CARMACK is a statute and could trump a contract agreement.
ALTADIS Case
This third case agreed with the Kirby ruling
UNCTRAL is a UN committee and is currently studying COGSA regulations which may address issues such as the above.
No action from the committee is required - we just need to keep a watch and Ed Greenberg will keep us posted.
NVOCC AND OTI AGENTS
Do agents of NVOCCs and OTIs also require an OTI license? What about agents such as warehouses?
The only agent a freight forwarder can have is a sales agent.
There are no comparable issues for the NVO arm of the OTI and these requirements need to be more clearly defined. Transportation Counsel previously sought an opinion for one of their clients and this issue has been debated within the FMC.
Team Ocean Services was recently penalized $100,000 in part for having unlicensed agents acting on their behalf. They have filed a petition with the agency to define the licensing/agency requirements and the services allowed.
We agreed that it is difficult to define when a vendor for NVOCC services is acting as the NVO agency and that it is prudent that NVOCCs have written agreements. However, we do not believe that the FMC should require written agency agreements; that this is a matter for the business judgment of the parties and concur that the agents of licensed NVOCCs should not need to have their own separate license. We will recommend to the board that the NCBFAA participate in the pending proceedings at the FMC.
FUEL SURCHARGES
It has been reported that fuel surcharges assessed by the railroads do not necessarily reflect the actual cost. Is this our issue to address? In the air cargo industry there is an investigation going on regarding the assessment of surcharges. Penalties have been assessed with treble damages to Lufthansa. All air cargo agents, even though no damage was suffered directly by the air forwarder, because there was collusion in establishing the fees, become a party to the civil suit. Unless we opt out of the class action suit the settlement would theoretically go to the party who booked the cargo (the IAC).
INDIA AND BANGLADESH ISSUES
No further actions have been made on the India and Bangladesh issues.
BILL OF LADING ISSUES
Certain countries require that NVOCCs consign the master bill of lading directly to the underlying consignee and not to the agent or steamship line. Is this a trend for foreign countries?
Indonesia, Egypt, and Ethiopia have adopted this policy thus far.
NVOCCs have experienced the carriers releasing cargo to anyone who issues the delivery order even if the house bill of lading has not been released. Express masters should not be used.
Forwarders "Best Practices" from Export Compliance Prospective
No report available
Air Cargo– Scott Case
The Transportation Security Administration (TSA) has been busy with new regulations. Over a thousand comments were received regarding the Air Security Proposed regulations issued earlier this summer. In general, the TSA has been receptive to our comments and suggestions. We are growing a relationship with TSA. October 1st was originally the date for the regulations to go into affect. Only Indirect Air Carriers (IAC) are privy to information regarding these regulations and our panel session at the Government Affairs Conference will restrict its attendees to only those we have verified as an IAC.
Note that the current port security bill does not address air regulations.
NEI Report
J an Fields reported that the Certified Transportation Specialist (CTS) course is close to being completed. Of the 32 chapters there are only four chapters missing. The completed chapters are in the review process.
Other Business, if any
SWPM
Non compliant containers do not necessarily have to go back to the originating country. They can be taken to a third country and the non compliant material removed.
Meeting adjourned

NVOCC Committee Report
September 16 2006

Slightly ahead of schedule of the BIG DIG in Boston the construction of the NVOCC Committee is almost complete. Your NVOCC Committee members are as follows:

Area 1 / Don’t know who from don’t know where
Area 2 / Currently the same person from Area 1
Area 3 / Ed Piza
Area 4 / John Abisch/Co-Chair
Area 5 / Lori Fleissner
Area 6 / Ben Coleman
Area 7 / Shane Garcia
Area 8 / See Area 1 and 2

Complete contact details can be found on the NCBFFA website.
As you can see from the above list there are still some openings. If you are interested in actively participating with this dynamic group please contact me with your interest.
Some of the items on our current agenda include:

  • Demurrage and Detention on Store/Door deliveries. This issue has been discussed with the carriers during meetings with the Carrier Best Practices Committee and unfortunately the findings are not favorable for NVO/OTI's. Since we are named parties on the B/L the carrier can hold us responsible for demurrage or detention even though the ultimately delivery is one they control. I would strongly suggest that you change your routing to terminate at a port and control the delivery independent of the carrier's involvement.
  • I have asked the Customs Committee to investigate the possibility of CBP in particular providing us with some type of written acknowledgement that exams can generally be done within 24 hours. The reason for this is we are trying to determine if the delay in exams is due to a CBP practice or terminal operators not staging equipment timely. With that being said the hope would be to get terminal operators to show some leniency on storage fees if the delay is a result of a Government action.
  • Fuel Surcharges
  • India and Bangladesh issues regarding NVOCC's having to register and post security deposits
  • Bill of Lading Issues with several governments requiring ultimate consignee reporting on the MBL even for NVOCC shipments with HBL details

As you can see there is an overlap of issues between our group, the Forwarding Committee and the Ocean Carrier Best Practices Committee, which is why we will actively participate with both committees. We will have representation at the upcoming OCBPC meeting in Houston on October 4th and I will provide details of that meeting upon my return.
Once the committee is complete I will be scheduling our first teleconference in an effort to review these and other issues and set priorities for our plan of attack.
I challenge the Area Directors and representatives from the APN to assist me in filling the voids in Area 1, 2 and 8 to ensure our committee represents the interests of our entire membership.
Our committee looks forward to serving our membership and welcome any and all input. Should you have any concerns please feel free to contact your local committee member and share your thoughts. We are much more effective with active participation from the entire membership so take advantage of this valuable resource.

Sincerely,
Joseph (Joe) Meunier
NVOCC Committee Chairman

Ocean Carrier Better Practices Sub-Committee Report
NCBFAA Board of Directors Meeting,
September 17, 2006,
Washington, D.C.

The committee continues its work on various issues involving ocean carrier service practices and practices concerning the assessment and collection of demurrage/detention charges. We have a couple of carriers who seem to really be trying, while others seem to give mere lip service. It becomes extremely frustrating, as at times we seem to take 1 step forward and two steps back. We are trying to keep our focus on working on items that will be of ultimate benefit to our mutual end customer. However, with many of the carriers we run into so many "industry" operational problems that it is frequently difficult to keep one’s perspective. We once again have to re-hash with Maersk Lines the concept of the ocean carrier taking liberties and invoicing the customs broker for demurrage/detention charges, even on their own door delivery. Maersk at the moment is trying to claim they have a right under the merchant clause in the terms and conditions. We are of the opinion that Maersk is wrong on this point and feel that if necessary we should consider addressing the issue with the FMC.
We are making some progress since the start of these quarterly meetings. A mission statement has been finalized and will be "tagged" to all our media releases. An overweight container policy statement will be voted on at the next meeting and we hope to clarify the various representations made by carriers so we can arrive at a common vision of responsibilities on store/door movements (which are treated identical to merchant haulage by some carriers.)
Our next meeting of the Ocean Carrier Better Practices Sub-Committee will be held in Houston, TX on October 5, 2006.

Darrel J. Sekin
John T. Hyatt
Co-Chairs